The present invention relates to the technical goal of providing prospective buyers and sellers of digital content with information and assurances, and relates more particularly to sampling, escrow, and barter tools and techniques for an automated broker to facilitate a market in digital content.
Advances in computer technology have created an enormous body of digital content, namely, content stored as bits in some computer-readable medium. Some categories of digital content have widely used non-digital counterparts. For instance, books are still more widely available in paper form than in digital form. Other categories of digital content exist primarily or solely in response to the widespread use of digital computers; examples include databases and software. Some categories of digital content exist primarily to entertain. Others reflect research, development, or marketing efforts. Regardless of such distinctions, one result of the computer revolution is a growing body of valuable artistic, technical, business, academic, and other content stored in various digital formats.
Another result of the computer revolution is relatively easy communication of digital content. The Internet (including the World Wide Web), email, xe2x80x9cinstant messagingxe2x80x9d services, xe2x80x9cchat roomsxe2x80x9d, news groups, electronic discussion forums and bulletin boards, and other computer-aided avenues of communication are now available in many parts of the world. One might expect these communication tools to support a thriving market in the growing body of digital content. Indeed, much digital content is advertised, purchased, and/or delivered through the Internet and other computer-assisted communication tools.
For example, demonstration versions of computer software can be downloaded by prospective users without any direct human action, once the software owner selects the software version and places a copy of the selected software on a web site, FTP site, or other electronically accessible location. Full-function versions can also be paid for and then obtained through commercial transactions that require little or no direct human action, other than having the seller initially provide a master copy of the software and having each buyer provide payment information such as a credit card number. Shareware software can similarly be downloaded using computer programs as intermediaries, rather than relying on a human sales clerk. In short, online software shops are well-known.
Moreover, transactions involving goods other than software can also be performed using software sales xe2x80x9cpersonnelxe2x80x9d. Auction sites such as www.ebay.com facilitate transactions involving software and many other types of goods, both digital and non-digital. Reverse auction or xe2x80x9cdemand collectionxe2x80x9d sites such as www.priceline.com facilitate transactions involving both goods and services.
These and/or other xe2x80x9ce-commercexe2x80x9d sites offer prospective buyers and competing sellers information about goods and services of virtually every type, and many sites also allow one to purchase goods and/or services on-line. To give just a few examples, web sites exist to advertise and/or sell patent rights, games, software, books, mortgage services, oil and gas properties, medical supplies, scientific equipment, factory simulation services, insurance services, computers, management consulting services, investment banking services, and xe2x80x9cadultxe2x80x9d content and services. Sellers"" sites generally provide textual descriptions of the goods and/or services being offered, and many offerings also include images and/or sounds that represent or constitute the offered goods and/or services. The images may be still images, video clips such as those in MPEG or AVI format, or user-navigable images such as those in the IPIX format.
The images sometimes include samples in the form of partial images or thumbnail images. These samples are apparently selected by the seller and/or approved by the seller for posting based on the seller""s understanding of the techniques used to create the samples. That is, the seller apparently knows what prospective buyers will see when they view the samples. If the goods are digital images, these samples may be presented with the promise that complete and/or larger images are available to be downloaded in exchange for payment. Similarly, video and/or audio clips showing part of a work may be presented to encourage purchase of a copy of the complete work.
Despite the enormous amount of activity in electronic commerce, problems remain. One factor that makes the market in digital content risky is the ease with which most digital content can be copied. Of course, many efforts have been made to reduce unauthorized use of digital content. For instance, copyright laws, other intellectual property laws, encryption that prevents use of a product without user registration and/or payment, other technical measures, and the basic honesty of many people, can each provide some protection against the theft of digital content.
But a content owner may still be justifiably reluctant to make that content available for inspection by prospective buyers, lest the content be copied and used without paying the owner. On the other hand, buyers may quite reasonably want to inspect the digital content before they pay for it. Unless the buyer and the seller have a working relationship based on successful completion of earlier transactions, or trust each other for some other reason, the lack of trust can prevent successful completion of the transaction even when such completion would benefit both parties.
To help illustrate the issues of trust involved in a transaction between a seller and a buyer, we define some notation. This notation, or similar notation, may have been used previously but the notation itself is not the invention. Rather, the notation is used in this Technical Background to describe prior approaches to marketplaces in digital content, and it is also used in later sections to describe the present invention, just as English (or another language) can be used for both purposes. That is, the fact that the notation is used in discussing both past approaches and the present invention does not mean that the invention described with that notation was previously known.
Naming the initial participants and items involved is straightforward: we use xe2x80x9cSxe2x80x9d to denote a seller, xe2x80x9cBxe2x80x9d for a buyer, xe2x80x9cGxe2x80x9d for the goods or services being sold, and xe2x80x9c$xe2x80x9d for payment (understanding that other currencies than U.S. dollars may also be used).
If all goes well a seller S transfers goods G to a buyer B and receives payment $ as compensation. But the order of events in the transaction can be very important, so the notation also describes different orders. When S hands B the goods and then receives the payment, in that order, the steps in this transaction may be represented as:
Sxe2x88x92Gxe2x88x92 greater than B; S less than xe2x88x92$xe2x88x92B.
Diagrams or other notation could also be used; the notation above has the advantage of not requiring special characters or any drawing (graphics) facility. If the seller first receives payment and only then turns over the goods to B, the transaction may be represented as:
S less than xe2x88x92$xe2x88x92B; Sxe2x88x92Gxe2x88x92 greater than B
or as:
S less than xe2x88x92$xe2x88x92B
Sxe2x88x92Gxe2x88x92 greater than B
If we do not know or do not care about the order (either act may occur first, or they may partially or completely overlap each other), then the transaction is shown as:
(Sxe2x88x92Gxe2x88x92 greater than B∥S less than xe2x88x92$xe2x88x92B)
or, equivalently, as:
(S less than xe2x88x92$xe2x88x92B∥Sxe2x88x92Gxe2x88x92 greater than B)
Finally, if the two acts must overlap in time, we write:
(Sxe2x88x92Gxe2x88x92 greater than B andand S less than xe2x88x92$xe2x88x92B)
or, equivalently:
(S less than xe2x88x92$xe2x88x92B andand Sxe2x88x92Gxe2x88x92 greater than B).
A single xe2x80x9cIxe2x80x9d means xe2x80x9corxe2x80x9d in the sense of one act or another act or both acts being done. A single xe2x80x9candxe2x80x9d means xe2x80x9candxe2x80x9d in the sense of both acts being done.
S and B will often negotiate before exchanging goods and payment, with one or more offers, counteroffers, conditions, and/or acceptances before goods and payment are exchanged. Such negotiations are written as:
S less than xe2x88x92Nxe2x88x92 greater than B
The xe2x80x9cNxe2x80x2xe2x80x9d stands for xe2x80x9cnegotiation(s)xe2x80x9d and the arrow is bidirectional to indicate the back-and-forth nature of most negotiations.
The seller S will often provide (and/or the buyer B will require) a description and/or a sample of the goods. These events can be represented (and annotated with comments) like this:
Sxe2x88x92DMxe2x88x92 greater than B //description and sample
Sxe2x88x92Dxe2x88x92 greater than B //description only
Sxe2x88x92Mxe2x88x92 greater than B //sample only
The sample M is a conventional sample, that is, it is obtained using tools and techniques which are known in the art and it is provided in the context of conventional commercial transactions. As explained later, the present invention provides novel samples, samples which are obtained by novel tools and/or techniques, and/or samples which are used in the novel context provided by the invention.
If a step is optional, we precede it by xe2x80x9c?xe2x80x9d. For instance, if the seller""s provision of a sample can be either present or omitted without substantially altering the trust (or other) issues being discussed, but negotiation is essential, we could write:
(S less than xe2x88x92Nxe2x88x92 greater than B∥?(Sxe2x88x92Mxe2x88x92 greater than B)); (Sxe2x88x92Gxe2x88x92 greater than B∥S less than xe2x88x92$xe2x88x92B)
The notation could be made even more complex, borrowing ideas from areas like computer programming, logical calculus, and multiprocessing, but the notation is not the goal. Understanding and improving transactions is the goal. We will use the notation and/or Figures hereafter.
Consider some trust issues, which may depend on the order of events in a transaction. For instance, consider transaction T1, which is illustrated in FIG. 1 and described by the notation as follows:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. S less than xe2x88x92$xe2x88x92B
3. Sxe2x88x92Gxe2x88x92 greater than B
If the description and/or sample provided in step (1) are faulty, then the payment in step (2) may be too high. For instance, the quality of the goods may be lower than the sample led the buyer to expect. Even if any description and/or sample provided in step (1) are accurate, seller S may xe2x80x9ctake the money and runxe2x80x9d, so the desired step (3) doesn""t occur as buyer B expected. Buyer B is forced to trust that descriptions and/or samples provided by seller S accurately represent the goods G, and buyer B is also forced to trust that seller S will not disappear after being paid, leaving buyer B without the goods G for which B paid.
An alternative is transaction T2, which is illustrated in FIG. 2 and described by the notation as follows:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. Sxe2x88x92Gxe2x88x92 greater than B
3. S less than xe2x88x92$xe2x88x92B
This approach forces seller S to trust that buyer B will not simply take the goods and fail to make payment in the desired step (3).
Another alternative is transaction T3:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. Sxe2x88x92Gxe2x88x92 greater than B andand S less than xe2x88x92$xe2x88x92B
That is, the seller and the buyer each hand the other the goods and the payment, respectively, at essentially the same time. This may be good in theory, but it is difficult in practice. Each must trust the other not to outwit or overpower them and then leave with both the goods and the payment, leaving one party empty-handed. To succeed reliably, T3 requires matching levels of trust and power, which are relatively rare when one looks at the wide range of parties that could mutually benefit from completing a transaction with each other.
Each of these transactions can be improved somewhat by having each party learn more about the other through negotiations, using transactional approaches such as those which are illustrated in FIG. 3 and summarized in the following notation:
Transaction TIN:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. S less than xe2x88x92Nxe2x88x92 greater than B
3. S less than xe2x88x92$xe2x88x92B
4. Sxe2x88x92Gxe2x88x92 greater than B
Transaction T2N:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. S less than xe2x88x92Nxe2x88x92 greater than B
3. Sxe2x88x92Gxe2x88x92 greater than B
4. S less than xe2x88x92$xe2x88x92B
Transaction T3N:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. S less than xe2x88x92Nxe2x88x92 greater than B
3. Sxe2x88x92Gxe2x88x92 greater than B andand S less than xe2x88x92$xe2x88x92B
But trust issues remain. In T1N, B might not receive accurate samples and descriptions, and B might not receive the goods or services after paying for them. In T2N, S might not receive payment after providing the goods or services. In T3N, each party may be at risk of being outwitted or overpowered by the other.
Another set of alternatives use a conventional agent A such as a broker, attorney, banker, or other xe2x80x9ctrusted third partyxe2x80x9d who is trusted by virtue of being neutral, bonded, licensed, and/or regulated, for example. The agent A is a human, or an institution directly operated and controlled by humans. One transaction T4 involving seller S, buyer B, agent A, goods or services G, payment $, and approvals OK is illustrated generally in FIG. 4. Time advances as one moves from the top of the Figure toward the bottom. In the notation we have been using, the transaction T4 goes something like this:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. ?(S less than xe2x88x92Nxe2x88x92 greater than B) // could also precede step (n), or precede and follow, or overlap
3. A less than xe2x88x92$xe2x88x92B // agent A receives money from buyer; A xe2x80x9choldsxe2x80x9d or xe2x80x9cescrowsxe2x80x9d the $
4. S less than xe2x88x92OKxe2x88x92A // A confirms to S that A has the payment
5. Sxe2x88x92Gxe2x88x92 greater than B
6. S less than xe2x88x92OKxe2x88x92B A less than xe2x88x92OKxe2x88x92B // B OK""s the goods and OK""s payment completion
7. S less than xe2x88x92$xe2x88x92A // A releases the funds to S
However, agent A must be trusted by both seller S and buyer B. A must be trusted by B, lest A leaves with the payment after step (3). B must also trust A to perform step (7) when, and only when, approval is given to A by B in step (6). A must be trusted by S, lest A leaves with the payment after step (3), or receives the payment but denies receiving it (no step (4)). There are other ways for the transaction to go wrong if trust is undeserved (such as partial payments or damaged goods or faulty timing), but these suffice for now.
Another transaction T5 involving an agent goes like this:
1. ?(Sxe2x88x92Dxe2x88x92 greater than B) ∥ ?(Sxe2x88x92Mxe2x88x92 greater than B)
2. ?(S less than xe2x88x92Nxe2x88x92 greater than B) // could also precede (n), or precede and follow, or overlap
3. (A less than xe2x88x92$xe2x88x92B ∥ Sxe2x88x92Gxe2x88x92 greater than A) // agent receives money from buyer and goods from seller
4. (Axe2x88x92OKxe2x88x92 greater than B ∥ S less than xe2x88x92OKxe2x88x92A) // agent confirms goods and payment OK and in hand
5. (Axe2x88x92Gxe2x88x92 greater than B ∥ S less than xe2x88x92$xe2x88x92A) // agent releases goods to buyer and payment to seller Again, agent A must be trustworthy and trusted. Otherwise, for instance, A could improperly retain possession of both the goods and the money after step (3). A could also intentionally misrepresent the amount, quality, or receipt of the goods, and/or the amount, quality, or receipt of the payment in step (4). A could also release an item (goods or payment) to one party but not release the other item in step (5) if A improperly favors one party unbeknownst (at least beforehand) to the other.
In short, conventional approaches to commercial transactions pose significant risks to buyers and sellers. These risks are increased by the ease with which digital goods can be copied once they are made available for inspection. The need for trust is also increased by the fact that the Internet and other communications media make it more likely than ever that a prospective buyer and prospective seller do not have a history of successfully concluded transactions (at least not with each other), and that they may well be separated by long geographic distances, by different natural languages, by different national laws, and/or by cultural differences.
Accordingly, it would be an advance to provide tools and techniques which make it easier for prospective buyers to inspect digital goods without thereby creating a significant risk that those goods will be copied, and hence stolen, by someone who is merely posing as a buyer.
More generally, it would also be an advance to improve the market for digital content by providing tools and techniques which reduce and/or meet the need for the parties in a transaction to trust each other.
Such tools and techniques are disclosed and claimed herein.
The present invention relates to methods, articles, signals, and systems for facilitating electronic commerce in digital goods. Examples of digital goods include musical works, visual works, and other artistic works in digital form; patent applications, engineering documents, CAD files, and other technical information in digital form;
software; mailing lists, customer databases, and other marketing information in digital form; intellectual property rights in patents, copyrights, trademarks, trade secrets, and/or technical or marketing know-how; and other information in digital form that does or may possess commercial value. The invention facilitates commerce in such goods by reducing or eliminating barriers by providing an improved basis for the parties to expect successfull completion of the desired transaction.
In a transaction according to one embodiment of the invention, each of the two or more parties to a transaction provides an inventive automatic broker with (a) the ability to deliver some item of value to one or more of the other parties, such as goods or payment, and (b) conditional authorization to deliver that item. Each party then reviews information from the other party or parties (often sent by way of the broker) and approves or cancels completion of the transaction. If the parties approve completion, then the broker effects the transfers. Otherwise, the broker returns the digital items of value, releases its hold on them, and/or deletes them, such that the broker no longer has the ability to deliver the items.
Unlike some conventional approaches to transactions, all brokering functions can be provided automatically. This reduces cost, increases transaction throughput, and reduces the opportunity for transactions to fail due to mistakes or bad acts by a broker.
In particular, digital goods can be escrowed with an automatic broker by providing the broker with a copy to be stored on a medium accessible only to the broker (or at least not reasonably accessible to the party that provided the goods to be escrowed). Goods could also be escrowed on a medium that is accessible to the party that provided the goods, by encrypting them and/or digitally signing them so any changes made after they are provided to the broker can be prevented or can at least be detected by the broker and/or the buyer. However, placing copies at a location not known to the seller and/or not accessible to the seller is preferred, since preventing the seller from retrieving all copies of the escrowed goods will significantly reduce the risk that the seller will prevent a buyer from receiving the goods after paying (or bartering) for them.
Payments, such as credit card holds, bank transfers, digital cash, and the like, can also be escrowed by the broker. In transactions that exchange goods for goods (i.e., barter transactions) rather than exchanging goods for payment, all of the digital goods can be held in escrow by the broker pending authorization from the parties to complete the transaction, after which the goods are released by providing copies to the parties, as previously specified by the parties. Note that xe2x80x9cpaymentxe2x80x9d is used herein to mean cash, currency, or similar liquid payment, as opposed to goods or services.
The automatic broker can generate samples of digital goods, to be provided by the broker to a prospective buyer. Samples can also be provided to the seller, but this is not always necessary or appropriate. In some embodiments, the seller does not know what technique will be used to generate the sample, so the seller is discouraged from providing goods that will pass inspection only if a particular sampling technique is used. The sampling techniques preferably permit the buyer to inspect the goods without thereby making the goods available for use by the buyer without purchase. Samples can also be provided in a catalog, to be browsed by specified or unspecified parties. For instance, a catalog might be open to general access within a company, or open to the public at large. Other aspects and advantages of the present invention will become more fully apparent through the following description.